Converting From Dollars To Gold and Silver

[85 Cutlass Brougham]

So, I have been thinking. With the current devaluation of the dollar and the specter of hyperinflation on the horizon, why not convert my savings from dollars to precious metals? We are printing money like mad and this will devalue the currency to some extent even if we do not go into hyperinflation, so why not do it? I am curious though as to where to buy gold in standardized forms like investment grade coins.

 

[srercrcr]

Yep, buy when gold is way up. Inflation isn't such a bad thing...interest rates will rise and the money you earn on ALL THAT SAVINGS will provide you with a comfortable lifestyle. If you combine that with being debt-free (like me) the cost of inflation is muted.
Inflation is great for people in debt...you pay it off with cheaper dollars, not so good for lenders.

 

[Tony_SS]

Interest rates have not rised... they are the lowest they've been in years. Hyperinflation is going to be the whiplash coming from all this overprinting/devaluation.

And Steve your logic is screwed up again.. During times of inflation, people's wages NEVER go up to match its rise, that's why they call it the invisible tax and it only increases while wages struggle to keep up, or as of lately, actually fall. So paying off that debt becomes even harder.

Inflation is NEVER muted.. are you stoned? For those on a fixed income like retirees, their purchasing power declines, because they draw the same check everymonth, but now milks $5 a gallon instead of $3.

As for gold... whenever you do buy it, take delivery! Checkout Midas Resources for gold, silver, platinum.

 

[axisg]

Do you want to physically purchase gold or just trade in it's stock value ?

Gold is great ( and yes you can buy it by weight ) but Diamonds are easier to store but even those are being de-valued because of the advancements in man-made stones. Storage is the problem with any these items because it can be stolen, lost or destroyed in a fire / flood / act of god or violence. Without proper storage it is also hard to insure.

My parents grew up just after the depression and they were taught by their parents to squirrel away their valuable stones and precious metals in case the dollar becomes worthless again.

 

[jonnyslick]

^ DON'T invest in diamonds. That's a joke. Diamonds, while they are a girl's best friend, are pretty much worthless. The only reason they are so valuable is because of the cartel's only allowing a certain amount per year to hit the street. They are a controlled product which have only gained real value in the last 100 years. Plus, even if they hold their value they'd be hard to spend in difficult times. I mean say you have a 2c diamond worth $2,000. But you just need some milk and eggs. Now what?

IMO, and what I am trying to do a little at a time, is buy 90% silver coins. I just picked up $10 face value of 90% coins for $100 at a coin show. It's a little more than the actual value of the silver, but, they are in an easy to spend form and it's easy to calculate the ACTUAL value of each coin based on it's weight and the price of silver. Basically right now each coin is worth $8 - $10 depending on the silver price.

Also, coins will hold the value for 3 reasons:

1. The actual silver/gold content
2. The fact it's actual printed/stamped money
3. The collectibility factor of the coin itself

I've looked into a lot of ways to "store" money and right now IMO the best way is silver and gold coinage. Although with gold you run into the same problem you can with diamonds, being hard to spend. Right now the prices on silver and gold are up yes. But if you follow the trend over the past 100 ... 1,000 even ... years you can see it's fairly safe. Besides I'm just using "extra" money for this anyway.

Do like I did and join a coin club (I know geeky) and go to some coin shows and start learning about the product before you buy. There are guys out there scaming people, and then you can find some fairly good deals too if you look around. But believe me, buying bulk silver and gold coins is getting harder and harder to do because a lot of people are thinking this way right now.

 

[85 Cutlass Brougham]

What I was thinking of is holding physical Gold or Silver coins, something like Gold Canadian Maple Leafs or Kugerands (SP?), not certificates. When the banks collapse or are nationalized, I want to posses a physical store of value. As for hyperinflation, it scares me to death. The small benefit to me would be that I could pay off my $50k mortgage and $300 in credit card debt, but my income is NOT set in stone. It fluctuates wildly as I work for minimum wage plus tips, minus gas, insurance and maintenance. If the dollar dies, so does the buying power of my customers and my income with it. Plus, should I get in an accident with a hyperinflated Dollar, my insurance will not cover my injuries or liabilities either. Gold is FAR from it's top right now as it will continue to get stronger as the dollar gets weaker. The dollar will inevitably get weaker as we almost doubled the number of Dollars in circulation in 2008 alone to pay for TARP. We are now printing even more with the stimulus package and the upcoming TARP II. The Democrats are quickly taking us down the road to ruin with their fiscal irresponsibility. This is not to say I give Republicans a complete pass either as Bush started us down this path last year. He's not in power now though, and the Dems are doing their best to ruin the currency. Similar problems exist with the Euro (A REAL MESS!), Yen, Pound, and Yuan which could lead to a global currency collapse in the next few years. If that happens, expect a singular global currency system that is electronic rather than physical in nature, possibly administered by an implanted RFID chip. This way the world economic system could control the value of the currency electronically, and also how it is spent and the taxes levied, etc. It would greatly reduce theft and illegal transactions because of the greater transparency afforded by such a system. Plus, with the De-Christianization of society, few will oppose it as the possible Mark of the Beast, finally making it possible to implement.

 

[srercrcr]

"Interest rates have not rised... they are the lowest they've been in years"

Did I say rates are high (or rised)? I said if inflation rises, rates will rise. Pay a visit to the late 70s'.

And wages DO increase in such times...that's why businesses and the stock market fears inflation. Paying off debt that was acquired in todays dollars will be easy with the cheap dollars you'll earn in future years. Do I have contact yet?

I never said you win with a totally fixed income, you injected that, but I will say if you're totally on Social Security, you get a inflation COLA every year. My Dad got 5.8%. He doesn't have to pay increasing rents or higher cost for housing, so he comes out ahead.

 

[85 Cutlass Brougham]

I am not talking about normal inflation rates of 20% per year. THAT is not hyperinflation. Hyperinflation is what happened in Hungary in 1946, or Germany in 1923, or Zimbabwe right now. The German hyperinflation took the Mark from being about 10 Marks to a US Dollar to 1 Trillion Marks to one US Dollar in 18 months. It is an inflation rate so high that it has to be written using scientific notation. During the Hungarian Hyperinflation of 1946, prices doubled every 15 hours. At the end of it, the total combined value of all of the currency printed was worth 1/1000 of a dollar. That's not just for one bank note, that's for ALL of the bank notes put together! To actually write the percentage with zereos for that inflation, it would look something like this: 358,000,000,000,000,000,000% for the annual rate of inflation. I fear this is what is about to happen in the US, Europe, Japan, etc. all at the same time as our fiat currencies all implode under the huge amount of debt accrued due to excessive give away programs and fiscal irresponsibility.

http://en.wikipedia.org/wiki/Hyperinflation

 

[Tony_SS]

"Interest rates have not rised... they are the lowest they've been in years"

Did I say rates are high (or rised)? I said if inflation rises, rates will rise. Pay a visit to the late 70s'.

And wages DO increase in such times...that's why businesses and the stock market fears inflation. Paying off debt that was acquired in todays dollars will be easy with the cheap dollars you'll earn in future years. Do I have contact yet?

I never said you win with a totally fixed income, you injected that, but I will say if you're totally on Social Security, you get a inflation COLA every year. My Dad got 5.8%. He doesn't have to pay increasing rents or higher cost for housing, so he comes out ahead.

Wages never keep up with the cost of living.. sorry, but they just don't. Especially in this economy, when we start seeing massive devaluation of the dollar, employers aren't just going to raise wages to keep up with hyperinflation. How could they afford to? And if interest rates rise along with that in a slumping housing market? It'll be disastrous.

And the reality of inflation is that it's always higher than what's reported. So not only will debt be more difficult to pay off in a depression, it'll be accumulated much faster while people go further in to it just to survive.

 

[85 Cutlass Brougham]

I will also add that right before the start of hyperinflation, deflation usually occurs, but it is part of the trigger mechanism for hyperinflation.

I'll also add in my favorite graph showing dollars in circulation. Please note what happens in 2008: